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The problems that dogged the economic picture throughout 2004 are showing few signs of diminishing. Commodity prices remain high, with US light crude oil staying stubbornly above the US$ 50 per barrel mark, and the US Dollar remains weak, particularly against the Euro.

A spike in oil prices in March, combined with a brief slump for the Dollar contributed to the Dow Jones Index's loss of 2.04 % between weeks eight and 12. The pattern was similar for the UK's blue-chip FTSE 100 Index, which lost 1.58 % over the same period. Only the Topix 500 showed improvement, with a 2.97 % gain.

Taking a longer view of the indexes illustrates just how heavily the commodity price problem and Dollar weakness has weighed on the

US market. Compared to a year ago, the Dow is up just 2.64 %, compared to the FTSE's much more robust 11.14 % gain.

Against this backdrop, the world's leading listed crane manufacturers continue to beat the wider market. IC's share index has risen 23.87 % over the last 12 months, and the sector outperformed the mainstream markets in March with a 3.25 % gain between weeks eight and 12.

It was a poor four weeks for the European manufacturers, with Palfinger losing 5.61 % and KCI Konecranes dropping 4.73 %. Hitachi also had a marginal loss, but gains from the other companies the sector, most notably Tadano and Terex, pushed the IC share Index up to 227.89 points.

In fact, the Index's peak came in week 10, with an all-time high of

234.17 points. While this is positive news, it does also mean that the crane sector lost some ground along with the mainstream markets in the latter part of March.

Currencies

Like the IC Index, it was an up and down month for the US Dollar. Overall it recorded a net gain against the Euro, Pound and Yen, which was largely thanks to the US Federal Reserve raising interest rates by 0.25 % in week 12.

Two weeks prior to this, however, the Dollar fell to a new low against the Euro of US$ 1 = €0.7427, or €1 = US$ 1.347. This was linked to a brief spike in oil prices, which impacted on the US in particular because it is a net importer of oil.

So the Fed's widely anticipated hike in interest rates was important for the stability of the Dollar. Arguably more important though were comments that it was going to get more aggressive with its rate rises in future. This should help restore some of the Dollar's former strength. At the same time though, it is likely to deflate the Dow, because any rise in the cost of borrowing has a negative impact on corporate profitability.

Outlook

A promising start to the year seems to have given way to more downbeat sentiment for the main markets. The lifting sector, as ever, remains buoyant by comparison. The last few weeks of March, however, showed that it is not immune to the factors that weigh on the wider stock markets.

The actions of the Federal Reserve will be critical this year. Foreign companies trying to export goods and services to the US will, of course, be keen to see interest rates rise quickly and the Dollar return to a stronger position. On the other hand, too much too soon would clearly deflate economic growth and the US stock markets. Finally, commodity prices continue to have a direct bearing on stock market movements.